This is what happens when Washington DC scares the living crap out of everyone:
SINGAPORE: Oil prices fell in Asian trade today on signs of weaker US energy demand and as positions hardened in a fiscal showdown in Washington that could push the world’s biggest economy back into recession.
New York’s main contract, light sweet crude for delivery in January was down 16 cents to USD 87.72 a barrel in the morning and Brent North Sea crude for January shed nine cents to USD 108.72.
A weekly US government report released yesterday showed a surge in supplies of gasoline and other products, indicating softer demand in the world’s biggest oil consuming nation.
The supplies of distillates, which include diesel and heating fuel that are closely watched at the onset of winter, rose by three million barrels, while gasoline inventories leaped by 7.9 million barrels, five times more than forecast.
“Oil prices fell… after data showed a huge increase in gasoline stockpiles in the United States last week,” Phillip Futures said in a market commentary.
The political impasse in Washington over avoiding mandatory fiscal cliff of tax increases and spending cuts in January that may toss the US economy back into recession was casting a cloud on sentiment.
This is what happens when you scare the living crap out of everyone with a chicken match. If you are invested in oil, get out while you can. On the other hand, gas prices are going to come down and for we middle class, that is a very good thing. But, for those in the market, it sucks. Good time to get out of futures and get into gold or something.
Oh yes, and the Democrats are owning this one too.